EDITOR – Tax exemptions for developers won’t solve housing crunch
(Image: File photo)
An editorial by Mel Rothenburger.
DEVELOPMENT COST CHARGES don’t make for exciting reading. In fact, a lot of people probably don’t even know what they are, but they go to the root of a very important question: how much should residents be expected to pay so land developers can increase their profits?
Right now, with the provincial government rushing pell-mell into control over local planning in order to build more housing, one line of thinking is that putting more money into the hands of developers will lead to an increase in housing construction.
DCCs, as they’re commonly known, are charged to developers to pay for infrastructure such as water and sewer, so existing taxpayers don’t have to. Otherwise, everyone else would be subsidizing new or relocating residents, and that wouldn’t be fair.
But one proposal is to waive DCCs for purpose-built for-profit affordable rental housing in order to encourage developers to build more such housing. While developers often complain about DCCs, others point out the DCCs are passed on to the new homeowners anyway, so eliminating them has little impact on the rate of construction.
DCCs were a topic of discussion at a meeting of the economic health select committee of council. A staff report said taking DCCs off the table would be a problem because the City lacks financial and staff resources to support such a program. But it also pointed out that such a waiver would result in a tax increase to cover the loss.
So, leave the DCCs where they are. Another proposal, to expand tax exemptions for revitalization — that is, improvements — to include purpose-built rental properties, found some favour.
Premier David Eby insists government intervention is needed to deal with the housing crunch but a sound argument can be made that if there’s a demand, the free market will handle it, and that tax exemptions of any kind for developers will solve little and cost a lot.
I’m Mel Rothenburger, the Armchair Mayor.
Mel Rothenburger is a regular contributor to CFJC Today, publishes the ArmchairMayor.ca opinion website, and is a recipient of the Jack Webster Foundation Lifetime Achievement Award. He has served as mayor of Kamloops, school board chair and TNRD director, and is a retired daily newspaper editor. He can be reached at mrothenburger@armchairmayor.ca.
ArmchairMayor.ca 
A more cynical view on DCCs from the north shore might be that since amalgamation in 70s, the city has Hoovered out truck loads of property tax money from the area. It seems precious little benefit or investment has been returned.
One would think prudent stewards of the local treasury would have anticipated the need to replace aging infrastructure and rather than spending like drunken sailors, would have saved funds in reserve to perform inevitable, predicable infrastructure replacement projects.
Instead, schools and pools have closed and DCCs assessed on new low income, high density housing with 10 years property tax holidays and relaxed to nonexistent parking requirements.
Similar ideas were pioneered in the USA in the 60s. They were known as “The Projects “. They are widely accepted now as a toxic influence on culture and breeding grounds for generational hopelessness and crime… but originally executed with the “best intentions”.
I sincerely hope I’m completely wrong about this and that things will turn out well, but history does tend to repeat.
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Off on a tangent but somewhat related.
It seems that the (basic) lessons of the “free market” are totally lost on our local municipal authorities in regards to millions spent on contracts for selected few. How can fleets of large and larger pickups, expensive equipment (often seemingly redundant) and a large workforce gingerly going about their business be justified? It is all costing us more than it should….by free market basic rules.
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I was a bit shocked to see that the City Gardens marketing staff were promoting the 10-year tax exemption to prospective buyers, since those units are in no way ‘affordable housing.’ It’s also puzzling why the city would offer such a prize when presumably the tenants of new housing would still be using city infrastructure like roads, parks, etc. And in the face of a huge tax hike. To me, this is just another instance of city hall being totally out of touch with taxpayer reality.
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And the taxpayers’ “subsidy” doesn’t end with tax exemptions. Another and little spoken about issue is, in some cases, the built infrastructure being built with poor oversight. Developers misdeeds eventually being rectified with public money. The more I think about it, the more I think the mayor was on the right track in dismissing the senior administrator.
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